Dow Component Growth Stocks
We will be highlighting stocks of the Dow Composite Average that are growing in excess of 10% per year. This estimate is based on the current projected 10 year value of the company and the current stock price. The stock’s compounded annual return rate plus dividends must be over 10% per year to in order to reach the stocks projected 10 year value for the company. For example, for a company to go from a value of $1 today to $2 in 10 years, the stock price would need an average return of 7.18%.
Corporate interest rates and the next earnings report will cause adjustments to be made to the value of the company. Remember, we are valuing the company 10 years into the future based upon long term past fundamental analytics. Think of the company’s quarterly financial results as a node in a 40 period moving average. Short term results may vary considerable from the long term average rates, but the 40 quarter analytics will keep you in line with the long term trends of the company. Volatility, along with shorter term trading techniques, can be used to your adantage. Trading techniques will be reviewed in future posts.
Dow Industrials Component
Goldman Sachs is currently with a price of 655 is at a 40% value of its current 10 year price target of $1644. This gives a projected compound annual growth rate of 11.48% counting its current dividend yield.
